Chrysler to Build New Engine Plant in Trenton

By: Lauren Woods

DaimlerChrysler AG's Chrysler Group is pretty serious with its turnaround plan. According to sources familiar with the plan, Chrysler is expected to announce its plan and strategy to build a new plant in Trenton this Wednesday. The plant will manufacture the next generation of V6 engines codenamed the Phoenix.

The announcement came after the Economic Growth Authority approved tax credits amounting to over $11.2 million over nine years for the new factory. The Trenton project with plans for a new axle factory in Marysville is expected to be announced during a press conference Wednesday at the Chrysler's Auburn Hills headquarters.

"We applaud the state's move," Chrysler spokesman Dave Elshoff said of the tax credits. "Incentives of this nature are an important part of the business-case building process to move forward with any investment."

Elshoff did not confirm that a new engine plant will be built at the Trenton site. As a fact, Chrysler has been looking at several sites within and outside the state of Michigan for a factory to build the new V6 engines. The engines will be integrated to Chrysler, Dodge and Jeep as well as Mercedes vehicles by 2010. They could be mated to a and other reliable auto parts to boost the vehicles' performance.

Chrysler's axle and engine plant projects are part of the company's plan to invest $3 billion in engines, transmissions and other powertrain components to enhance fuel economy as part of its turnaround plan. Chrysler lost $1.5 billion last year so it has entertained several job cuts, plant closures, and production reduction to reduce production costs and restore profits.

Trenton Mayor Gerry Brown said that the city is offering Chrysler an incentive package worth more than $62 million to build a new plant there. "We made it very hard for them to walk away," he said in an interview this Tuesday. Brown, along with Gov. Jennifer Granholm and United Auto Workers President Ron Gettelfinger, will be at Wednesday's announcement.

According to a briefing of the project prepared for the Michigan Economic Growth Authority, "The new Trenton plant would be built adjacent to the existing engine factory. It would start production in April 2009 for the 2010 model year."

The tax credits given by the state would keep 485 jobs in Trenton with an average weekly wage of $1,403. In exchange for the tax break, the ailing American company would invest at least $500 million in at least two other Michigan facilities that were not identified, but one likely is the new axle plant. The upcoming plant is not expected to replace the existing Trenton engine plant but analysts say that could happen eventually.

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